UPI to Revolutionize Payments with AI: Conversational and NFC-based Transactions on the Horizon

UPI Gets a Futuristic Upgrade: Conversational Payments and NFC-Enabled Transactions

The Reserve Bank of India (RBI) has proposed two new technologies for UPI (Unified Payments Interface), which would allow users to make payments in a more convenient and seamless manner.

Reserve Bank of India (RBI) Governor Shaktikanta Das has introduced two groundbreaking technologies set to transform UPI (Unified Payments Interface), allowing users to make swift payments through conversational interactions or by tapping their phones on point-of-sale (PoS) devices utilizing Near Field Communication (NFC).

Conversational Payments via AI:

The RBI's first proposal involves conversational payments, offering users the ability to engage in conversations with AI-powered systems to facilitate payments. Initially accessible in Hindi and English, this feature is expected to expand to include more Indian languages.

The RBI is set to issue instructions to the NPCI (National Payments Corporation of India) shortly, pushing this innovative payment method forward.

Small-Value UPI Payments with NFC:

The second innovation entails enabling small-ticket UPI payments via NFC technology through the UPI Lite on-device wallet. Additionally, the central bank plans to increase the transaction limit for small-value digital payments in offline mode, elevating it from INR 200 to INR 500, all within the monthly limit of INR 2,000 per payment instrument.

Reserve Bank of India (RBI) Governor Shaktikanta Das has highlighted that these initiatives will significantly enhance the adoption and accessibility of digital payments across the nation, marking a pivotal development in the realm of UPI.

Embracing NFC Technology:

NFC payments have already established themselves in various countries, including Japan and China. Apps like China's WeChat have enabled NFC payments across multiple channels, offering users the convenience of making small payments even when they don't have their debit or credit cards on hand.

While UPI has featured a "tap to pay" functionality, this new proposal is set to further streamline and expand these capabilities.

Global Recognition and Expansion:

On the international stage, UPI has been gaining widespread recognition, with the NPCI in discussions with approximately 30 countries interested in implementing this payment network. To facilitate this global expansion, the NPCI has created a dedicated entity called NPCI International Payments Limited.

In recent developments, UPI has successfully integrated with Singapore's PayNow and France's Lyra Network, and talks are underway with the UAE for imminent UPI implementation.

Impressive Growth of UPI:

Notably, UPI transactions exhibited robust growth in July 2023, with a 6.6% month-on-month (MoM) rise to reach 996 Cr transactions valued at INR 15.34 Lakh Cr. This marks a 4% MoM increase in transaction value. In terms of transaction count, July 2023 figures represent a remarkable year-on-year (YoY) growth of 58% from 628 Cr, with transaction value indicating a YoY growth rate of 44% from INR 10.63 Lakh Cr in July 2022.

Relevant and latest facts for UPI 

• The conversational payments feature is expected to be rolled out in the near future, with the initial focus on Hindi and English languages.

• The NPCI is working on developing standards for NFC-based UPI payments, with the aim of making the feature available on a wide range of devices.

• The RBI's proposals are seen as a move to further deepen the reach and use of digital payments in India.

• UPI is currently the most popular digital payments platform in India, with over 600 million users.

• The growth of UPI has been driven by its ease of use, security, and interoperability.

• The addition of conversational payments and NFC-based payments is expected to make UPI even more appealing to users.

• The NPCI is also working on expanding UPI's international footprint, with the aim of making it a global payments platform.

Stay tuned for an era of effortless payments through UPI, thanks to these exciting technological advancements.